Photo Courtesy To: http://www.ncbi.nlm.nih.gov/pubmed/8454397
Business Insider, one of the top business blogs around, posted a very controversial blog about analysts on Wall Street being too “bullish” about certain shares so that they can attract their clients to hire them in the future.
The only issue that I had while reading this article was this: There is a clear tradition of investment bankers shifting from the “selling-side” to the “buying-side” over the time period of approximately 3 years. This means that the majority of analysts have the desire to, one day, be in the position of their clients. That is why I do not think having a bullish attitude when affiliating with your clients is a bad thing.
Yes, I understand that sometimes according to this blogger’s “research” the analysts will give inaccurate information, just to make themselves sound more optimistic. Yet, there can be many other reasons as to why someone would be more optimistic or pessimistic about a certain stock. They do the research and then look at it from their perspective. This applies to EVERYTHING! It is impossible to single out a specific reason as to why an analyst is more bullish.
Therefore, I cannot agree with this blogger’s opinion that the analysts that promote certain stocks in order to gain a positive image in their client’s mind is an inadequate deed.
http://www.businessinsider.com/wall-street-analyst-conflict-study-november-4-2014-11